State pensions should be slashed

BobQ

taktikback wrote: »

How exactly did we get from "state pensions should be slashed" to "we should kill ourselves"?

That would be my fault, but I was speaking of compulsory termination!:)

jamesd

uknick wrote: »

People pay into ALL benefits. Nobody pays into a "pension" fund, apart from their SERPS and S2P, or whatever its going to be called until 2015 when it's scrapped.

The National Insurance Fund has a portion for the state pensions and includes the basic and additional state pensions. The National Insurance revenue is not available for use for general government expenditure, unlike the Consolidated Fund raised from taxes. The National Insurance Fund doesn't hold enough to pay everyone for life, because it's just the excess of collection from NI over expenditure on the payments made, with most revenue directly paying for expenditures.

The National Insurance revenue is not used to pay for all benefits, with benefits like the Minimum Income Guarantee for pensioners and Tax Credits coming out of general taxation. Payments for those are not based on contributions made.

mgdavid wrote: »

a few posts seem to suggest that NI contributions are specifically for the State pension fund; what about the NHS? - I thought that was supposed to be funded from NI contribs too?

A portion of National Insurance revenue is passed on to the NHS before going on into the National Insurance Fund. But only a portion, not all of it. All of NI is about 21.5% of all revenue collected by HMRC. In England, NHS funding is about £2,000 per person per year.

peterg1965

When the Tories came to office in 2010, George Osbourne announced a study into combining NI and General taxation, acknowledging that NI is purely a form of taxation which provided funds which went into the Treasury. Not sure what came of this initiative, probably parked in the all too difficult tray.

jamesd

NI is part of revenue but since it can't be used for general spending it's not quite the same as a tax and the money doesn't just go into the Treasury.

Doing something like making it part of income tax would have lots of hard to deal with effects, like a 50% increase in income tax on pensioners and the unemployed. Should pensioners pay for unemployment insurance, say, which they don't at present because they don't pay NI. But they also don't pay the NI portion of NHS funding and on average they are higher users of the NHS. There's also a useful social value in knowing that it is being specifically taken for a range of contributor national insurance based schemes, not just general tax.

CLAPTON

jamesd wrote: »

The National Insurance Fund has a portion for the state pensions and includes the basic and additional state pensions. The National Insurance revenue is not available for use for general government expenditure, unlike the Consolidated Fund raised from taxes. The National Insurance Fund doesn't hold enough to pay everyone for life, because it's just the excess of collection from NI over expenditure on the payments made, with most revenue directly paying for expenditures.

The National Insurance revenue is not used to pay for all benefits, with benefits like the Minimum Income Guarantee for pensioners and Tax Credits coming out of general taxation. Payments for those are not based on contributions made.

A portion of National Insurance revenue is passed on to the NHS before going on into the National Insurance Fund. But only a portion, not all of it. All of NI is about 21.5% of all revenue collected by HMRC. In England, NHS funding is about £2,000 per person per year.

there is no NI Fund

Daniel54

CLAPTON wrote: »

there is no NI Fund

what is this then ?

http://www.dmo.gov.uk/index.aspx?page=CRND/CRND_Portfolio/NIFIA

CLAPTON

Daniel54 wrote: »

what is this then ?

http://www.dmo.gov.uk/index.aspx?page=CRND/CRND_Portfolio/NIFIA

it's clearly a book keeping exercise.
there are no funds invested independently of the government.

jamesd

The funds are normally invested in gilts. Issued by the government but in the control of the National Insurance Fund. And that money can't be spend on general expenditure, nor can the NI income.

Steve059

BobQ wrote: »

That would be my fault, but I was speaking of compulsory termination!:)

Don't give IDS ideas. After all, he does only support "hard working people", ie. those earning over, say, £75K a year.

Pensioners clearly aren't working now and probably didn't work hard/earn enough in the past.

CLAPTON

jamesd wrote: »

The funds are normally invested in gilts. Issued by the government but in the control of the National Insurance Fund. And that money can't be spend on general expenditure, nor can the NI income.

Following a review by HMRC, HM Treasury and CRND, a change to the NIF investment strategy was approved in December 2006. This change has resulted in lower administrative charges to the NIF. The change was effected in January 2007, when all the Investment Account’s gilt holdings were sold and the proceeds placed into the Debt Management Account Deposit Facility. Since then, the earnings of the Investment Account have been much more closely aligned to the Official Bank of England Rate (Base Rate).

clearly the NI 'fund' simply reduces current government debt and payout in say 30 year will simply be a charge on taxpayers at that time.

they are are only booking keeping entries and the scheme is simply a pay as you go scheme, totally dependent upon current taxpayers at the time of payment.